Factual Matrix 

In the case of Gautam Hari Singhania v. State of Maharashtra a request contesting the validity of a decision made on May 19, 2014, by a Judicial Magistrate First Class to issue a summons for violations of Sections 18(1), 49(1), and 36(1) of the Legal Metrology Act, 2009, as well as Rules 18(1) and 24 of the Legal Metrology Packaged Commodities Rules, 2011. The applicant is Raymond Ltd.’s managing director, and the other directors were also charged in the present matter, which was brought by the Inspector of Legal Metrology. According to the complaint, the named Inspector came across a cardboard package of fabric during his inspection that was missing a declaration including information about the commodity, the maker, the packer, the quantity of pieces, etc. The Inspector drew the panchanama, confiscated the aforementioned shipment, sent the firm a compounding notice, and filed a complaint with JMFC, saying that the aforementioned infractions constitute offences under the LM Act. In response, the JMFC acknowledged the incident and launched a procedure against the applicant and other directors.

Observation of the Court 

The Bombay High Court Single Judge Bench Justice G.A. Sanap reversed and annulled the stated ruling, stating that specific allegations in the case about the Directors’ participation in the company’s operations were necessary to impose vicarious liability on Directors.

The Court examined Section 49(1) of the LM Act, which lays forth the authority for the court to publish the name, address, and other information of corporations found guilty of violations. The applicant’s claim that no one was nominated to exercise authority under Section 49(2) of the LM Act was brought up by the court, and the prosecution failed to refute it. According to the Court, Section 49(1) offers a full framework for determining the Managing Director’s vicarious culpability for violations committed by the corporation. The complaint, however, did not contain any specific allegations to impose such vicarious culpability on the applicant or the other directors, and no part of any crime was ascribed to the applicant.

The Bench further emphasised that because the company was named as an accused party and that the alleged offence was committed by the company, any Director would be held vicariously liable by virtue of the company’s alleged actions. As a result, the complaint must make the necessary allegations to hold the Directors vicariously liable. The Court also emphasised how vague the allegations in the complaint were, stating that, aside from the company name, it was pleaded generally that the accused is either a director of the company but that no specific allegations were made to attribute any role in any capacity to fasten liability for the prosecution of the applicant, a fact that was overlooked by the JMFC.

The Court observed that, in accordance with the plan outlined in Section 49 of the LM Act, the JMFC was obligated to apply his or her judgement to the legal provisions and circumstances, record a prima facie agreement with the applicant’s role, and issue the process mechanically while doing so. The ruling dated 19-05-2014 to the extent of the instant petitioner was overturned and set aside by the Court after it determined that the Magistrate’s decision could not be upheld.

CASE NAME – Gautam Hari Singhania v. State of Maharashtra CA No. 223/23